[gnicholas]

What are the appropriate or possible responses to being publicly asked if you're going to do a layoff, in the case that:

(1) you are definitely going to do a layoff

(2) you have not yet decided but are considering it

(3) you are definitely not doing a layoff

In the past, HNers have mentioned that if you admit you're going to lay people off, then your best performers will leave. Is that true? If so, what should companies say in order to be truthful and to help keep the company from falling apart?

Relatedly, how does a company credibly promise not to do layoffs, to put people's minds at ease?

[capableweb]

If you know you're gonna do layoffs, say that it's being considered, and then do the layoffs.

If it's possible you'll do layoffs, says it's possible that you'll do layoffs, figure out what you wanna do, then do that.

If you know you're not gonna do layoffs, say you know you're not gonna do layoffs, and then don't do layoffs.

If people will leave because you say there will be layoffs, they would leave even faster if you didn't say you'll do layoffs but then do it anyway.

[bb88]

It's one thing to say, you're struggling, but you think you can make it without layoffs. Or another thing to say your financial models say for the next 90 days you're okay at the moment. Or you're trying to shift money around, or trying to increase revenue, or to say you're looking for funding...

If people invest their lives in your company (relocating, working overtime, etc), they deserve the honest truth about what's happening. Particularly in a world where there's a high demand for tech workers.

[erichocean]

> If people invest their lives in your company

I think I may see the problem.

[bb88]

There's a reality you're living that must be quite different than the rest of the world.

[danaris]

What, you mean our system of corporate capitalism that still mostly requires relocating for a job, and incredibly strongly encourages working long hours to "prove yourself" and "get ahead" and whatnot?

[hotpotamus]

Don't forget the part where medical care for your family is unaffordable unless you have employer provided insurance.

[Lerc]

> if you admit you're going to lay people off, then your best performers will leave

You are not simply entitled to your best performers. You are in a relationship where they provide their services for money. Staff are not property.

Restricting information to influence their decision making is poisoning that relationship.

[ls15]

> Restricting information to influence their decision making is poisoning that relationship.

They also poison the employee's relationship with the next employer. Once burned, it is a little harder to trust the next employer.

[onion2k]

In the past, HNers have mentioned that if you admit you're going to lay people off, then your best performers will leave. Is that true?

Any kind of layoffs will cause your best performers to leave regardless of whether you tell people ahead of time. It's a strong signal that the company is in survival mode instead of growth mode, which at least means raises and bonuses are in doubt and at worst means the company is going under soon. It's better to accept that you're going to lose more people than you plan for and deal with the fallout as best you can.

[capableweb]

Another way of going through it, is to share that you might have to do layoffs, watch as people leave and enough people might leave so you don't have to do layoffs in the end. If enough people don't leave, go ahead with layoff. It's both transparent and honest, no lies required.

[dougSF70]

Except, weaker performers will stick around for severance and top performers will leave. If sufficient above average performers leave to avoid a layoff you are left with a weaker team. In this instance company doesnt get to chose, which it might want to. Best idea is not to provide reassurance if you cant back it up. In which case, say nothing.

[SkyPuncher]

The better performers who want to leave will leave regardless of when the layoff is communicated.

[skeeter2020]

IME it's not that top performers leave with any pre-announcment, but after layoffs, IF they think their mid-to-longer-term incentives (options, profit sharing, raises, etc) will be cut dramatically. The biggest immediate impact is that productivity goes to negative eleven from the time the first person learns about upcoming lay-offs until well after the act FOR EVERYONE.

Company credibility is shot when you do any lay-offs, but individual credibilty can survive one round. There is no way to maintain faith and trust in the organization AND do lay-offs, so you should give no notice until preferably after the fact.

[r053bud]

I will always want honesty from the company I work for. If they pull something like this, trust is completely lost and I’ll be looking elsewhere. If I were in charge, I’d admit our mistakes (we over hired, didn’t foresee economic conditions, invested in the wrong areas) which caused the need for layoffs. I’d never tell my employees that there would be no layoffs unless I was 100% certain of it.

[skeeter2020]

Looking for honesty from a company is kind of silly when you think about it... it's a pathological, amoral entity with a single, well-defined legal purpose, afforded some notion of human rights. Executives are legally obligated to serve it. They can provide honest analysis after the fact but early notice is a mistake, even if it means lying to you.

[jbay808]

Trust, which is instrumentally valuable, is the wage earned by honesty. Even a pathological, amoral entity will find value in being honest, unless they assign no value to being trusted.

[chii]

The company entity will not trust their employees generally. They verify, or use multiple parties to prevent any possible trust needed to perform a task - that's why there's "supervisors" and manager roles.

The employees, on the other hand, is required to trust the company. It's a condition of employment. For example, you are only paid after the work is completed - this requires that the employee trusts the company to make good on the wage. Of course, this is legally mandated - but sometimes, despite legal mandates, unpaid wages exists, esp. when company is in financial trouble.

It's an asymmetrical relationship.

[jbay808]

I mean trust in a communications sense: the amount that a listener believes your message when you say something. The purpose of communication is, ultimately, to change minds. If your audience has lost all trust in you, then your message will be treated as complete noise, and regardless of whether you say X or Y, it will have zero impact on a listener's belief about X or Y.

If your trusted friend says "I'm in trouble and I need a loan", you probably believe them. If a spam email says the same thing, you probably won't.

Employers and employees are on an equal footing in terms of this type of trust. Whether you're speaking to your senior manager or to your new hire, you need to establish that your words carry factual meaning. Fail repeatedly at that, and you'll end up on a mental spam filter.

When Enzersdorfer-Konrad says "There will not be any kind of massive layoffs within Bitpanda", the impact of that message on employees is proportional to how much trust Enzersdorfer-Konrad, and Bitpanda, have earned. If they have a record of lying and deceiving their employees, then such announcements are complete noise. There's not even any use in uttering them.

Telling such a blatant lie -- or, to be charitable, an overconfident wrong prediction -- costs credibility that has to be earned back the hard way. The next time Enzersdorfer-Konrad says something, even if he really means it this time, it won't carry weight. He'll have to build, or rebuild, a strong record of honesty before people listen to him again.

[jenny91]

There are plenty of societies where the people hold companies up to standards other than just maximal exploitation for shareholder value. It doesn't have to be that way.

[daniel-cussen]

Yeah and they could avoid layoffs if they cut the executive pay down.

[willcipriano]

Flip the situation around so you can emphasize more easily.

Let's say your employee walks up and they tell you that "my life situation is uncertain going forward, my ability to deliver on my end of this bargain may be limited and outside of my control."

On the other hand you have the resume of someone you can hire, they are willing to agree to a contract where they will deliver more productivity than the previous employee, problem is you can only employ one of them.

If feeding your family depended on the productivity of the person in that role, who do you go with?

[danaris]

If you're doing layoffs, then generally one of three things is true:

1) The company is in bad shape, and the layoff is a Hail Mary play to try and delay the inevitable long enough for a miracle to happen

2) The company is in fine shape, but for whatever reason, has done an honest self-assessment and determined that they've got more people working there than are necessary to continue operating (and, if they're really being both honest and thorough, has done at least some due diligence to identify the genuine low performers)

3) The company is in fine shape, but the higher-ups and/or shareholders think they should be getting more money, so they're cutting costs and pocketing the difference

Two of those three are excellent cause to leave, whether or not the layoffs are announced ahead of time. Many cases of #2 are also cause to leave, when they do not do the appropriate due diligence and lay people off indiscriminately or according to nepotism/who plays golf with the right people.

If your best people will leave upon finding out that you're laying people off, then they will probably leave whether or not you announce it ahead of time like decent people—the only question is when.

So basically, you're compromising on honesty and basic decency in order to maybe buy yourself a few more months.

[Xylakant]

There’s also 4) the company is overall not in a good shape, but some parts are and others not. Closing down the loss-generating chunks and shrinking to concentrate on the actual profitable sectors can be a successful way out.

[danaris]

That's fair; I think it's similar enough to my #2 that my points related to that still largely apply.

[Jistern]

Good point! I hadn't thought of that.

[tgsovlerkhgsel]

> (3) you are definitely not doing a layoff

> Relatedly, how does a company credibly promise not to do layoffs, to put people's minds at ease?

In both cases: A hard, legally binding commitment.

That said, a company that promised employees no layoffs should not be able to do layoffs and/or be subject to fraud charges.

[ergocoder]

For a public company, you cannot disclose info like this in a casual interview.

The answer is always "no". You won't do layoff.

Not sure if bitpanda is a public company, but it is surprising people don't understand the basics like this.

[woodruffw]

You can do what everyone else has always done: simply not comment. It's always an option.

[jlg23]

Except for that silence speaks loudly in some circumstances.

[bombcar]

Probably being open from the beginning is the way to go, but if your top performers are going to leave because they hear layoffs are coming, they will still leave after layoffs have arrived. Most likely won't.

[gnicholas]

So is this part of the reason why Zuck would have framed FB's impending actions as being focused on low-performers? That way, people who believe themselves to be high-performers wouldn't bail.

[jcadam]

Problem: Imposter syndrome.

The overlap between people who think very highly of themselves and your top performers may not be 100%. It's probably quite a bit less.

[shapefrog]

It also depends on middle managers identifying the actual low-performers and not marking for removal high performers who they don't like or might take their job in a slimmed down org.

[daniel-cussen]

Imposter syndrome when you're told an imposter second-to-second.

[madeofpalk]

If you're going to do a lay off, your "best performers" will know eventually.